The Dollar index is reversing confirming the warning signs I've been giving for the last few sessions. Price is about to break the bullish channel but bulls should not worry for the longer-term trend as long as price is above 95. However, a bearish scenario implies that we could be at the start of a bigger than normal reversal that could bring price below 92.
Green lines - bullish channel
Red line - long-term support
The Dollar index is turning lower as expected. Support is at 98.40-97.80. Only a break below this area will probably bring in more sellers towards 96.50. The 96.50 is the breakout level on a weekly basis and a back test towards that area is very possible.
Green line - important medium-term support
Price is getting rejected at the upper trading range boundary. The bearish scenario that implies a move below 92 will increase its chances if price breaks below 96.50-95 area. Until then Dollar bulls will still have hopes that this pull back is a buying opportunity. Personally, I believe that price will continue to trade inside the trading range and currently bearish positions are favored.
The material has been provided by InstaForex Company - www.instaforex.com